Hedge Fund Fee Attack: Paying Money to Lose Money?

The video discusses the challenges faced by hedge funds, particularly the underperformance of well-known managers like David Einhorn, Bill Ackman, and John Paulson. It highlights how market conditions make it difficult to achieve an edge, leading to crowded trades and liquidity issues. Emerging managers with smaller portfolios may avoid these pitfalls. The video also covers significant redemptions from hedge funds, with $16.6 billion withdrawn in recent quarters, and the potential impact on the industry.

Why are investors questioning the fees charged by hedge funds?

• Because hedge funds are reducing their fees.

• Because hedge funds are losing money despite high fees.

• Because hedge funds are outperforming the market.

• Because hedge funds are investing in new technologies.

What is one reason for the underperformance of hedge funds mentioned in the video?

• Hedge funds are investing in too many different stocks.

• Hedge funds are not investing in liquid assets.

• Hedge funds are focusing on emerging markets.

• Hedge funds are crowded into the same trades.

How do smaller emerging managers differ from larger hedge funds in their investment strategy?

• They focus on technology stocks.

• They avoid crowded trades and invest in smaller assets.

• They follow the same strategies as larger funds.

• They invest in larger, more liquid assets.

What amount has been pulled out from the hedge fund industry in the last two quarters?

• $25 billion

• $10 billion

• $20 billion

• $16.6 billion

Which organization recently decided to pull $4 billion from hedge funds?

• CalPERS

• New York Pension Fund

• AIG

• Goldman Sachs